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Sri Ram Food Industries v. State of Himachal Pradesh and Ors. - (High Court of Himachal Pradesh) (07 Oct 2016)

Malafides must be specifically pleaded and proved; bald and unfounded allegations of malafides not sustainable



Petitioner firm is aggrieved by non-awarding of tender despite it being lowest tenderer and has filed this petition. In instant petition, Petitioner prayed for issuance of an appropriate writ, order or direction quashing act of respondent thereby cancelling tender dated 29th August, 2016, wherein Petitioner has been declared as L1 as well as short-term E-tender notice calling for tenders to be opened on 26th September, 2016.

Malafides according to Black's Law Dictionary 10th Edition means "with bad faith". Malafide is said to be an intentional doing of a wrong act without just cause or excuse, it is done with an intention to inflict an injury or under such circumstances that the law will imply an evil motive to the act. Malafides have to be established on the basis of cogent evidence and material as may be available on record and merely on the basis of some vague and unsupported material, writ Court cannot draw an inference, much less, a conclusion about the existence of malafides. Indisputably, it is always open for Court to go into the question of malafides raised by a litigant, but in order to succeed, much more than a mere allegation is required. Bald and unfounded allegations of malafides are not sustainable and that malafides must be specifically pleaded and proved. It is equally settled that when such allegations of malafides are made, they should be made with all sense of responsibility, otherwise, the maker of such allegations should be ready to face consequences.

There is every presumption in favour of the administration that the power has been exercised bona fide and in good faith. Principles of judicial review under Article 226 of the Constitution of India would apply to exercise of contractual powers by Government only in case the process adopted or decision making process of the authorities is wrong and illegal and in order to prevent arbitrariness or favoritism. Government is the guardian of the finances of the State and is, therefore, expected to protect financial interests of the State.

It is not the domain of the Court to embark upon uncharted ocean of public policy in an exercise to consider as to whether a particular public policy is wise or a better public policy can be evolved. Such exercise must be left to the discretion of the Department. The Court can only interfere if the policy is absolutely capricious or totally arbitrary and unfounded ipse dixit offending the basic requirement of Article 14 of the Constitution of India. In economic and policy matters, the scope of judicial review is extremely limited.

Decision regarding cancellation of tender is a bonafide one and is otherwise in larger public interest because by not accepting tender of Petitioner firm, State Government is saving approximately a sum of ` 12 crores. It is not a fit case to exercise powers of judicial review as there is no violation of the provisions of law and further there is no procedural aberration or error in assessment. Power of judicial review will not be permitted to invoke to protect private interest at the cost of public interest.

Relevant : Jagdish Mandal versus State of Orissa and others  (2007) 14 SCC 517; MANU/SC/0090/2007 Gulam Mustafa and Ors. vs. The State of Maharashtra and Ors. MANU/SC/0400/1975 , Tata Cellular vs. Union of India MANU/SC/0002/1990


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